Challenge

A wealthy client was frustrated with the lack of attention and constant turnover in personnel that he was experiencing with one of the national CPA firms. He was incurring large losses in real estate which were being disallowed due to the passive loss rules.

He felt no one in the large firm was really focused on his situation, and he desired better service.

Solution

After just a few meetings with the client, we got to know enough about his entire portfolio of investments, especially his extensive real estate holdings, to realize that he qualified as a real estate professional. This obscure designation was overlooked by the larger firm but held huge tax savings for the client.

It transformed his real estate losses into “active,” thus changing $1,000,000 of disallowed losses into allowable deductions. This saved the client taxes in excess of $300,000 in just the first year of doing business with us.